Vehicle replacement vs. GAP

Donna Harris covers automotive retailing for Automotive News
In my last blog, I wrote about how an F&I manager said some of her biggest competition for F&I business was coming from insurance companies.

Many auto insurance carriers provide GAP coverage directly to consumers, but last week I wrote that Allstate is a direct provider, and that was wrong. Allstate, through Allstate Dealer Services, only provides GAP coverage to consumers through dealerships.

However, Allstate does offer vehicle replacement coverage on some auto insurance policies sold directly to consumers. Allstate's online promotion of this coverage states that if a new car is totaled within the first three model years, the customer gets a new car.

Though that coverage is different from GAP, if the buyer already has vehicle replacement, why would they want GAP, which pays the difference between the vehicle's depreciated value and the customer's auto loan balance?

So like I said, some of the biggest competition for F&I business is coming from insurance companies.